• Non convertible debenture - Rs. 35 crore Rating : AAA
• Non convertible debenture - Rs. 175 crore Rating : AAA (reaffirmed)
• Fixed deposit programme Rating : FAAA (reaffirmed)

The Great Eastern Shipping Company Limited’s (GESCO) Rs. 1.75 billion NCD issue and Rs. 350 million new NCD issue has been rated ‘AAA’ (pronounced ‘triple A’). The company’s Fixed Deposit Programme’s rating ‘FAAA’ (pronounced ‘F triple A’) rating has been reaffirmed.

The ratings reflect the company’s strength arising from a diversified fleet of ships that protects the company against downturn in any particular segment of the cyclical shipping industry and the proactive and financially conservative management that has demonstrated its ability to sustain profitability despite freight rate fluctuations and has maintained a financially strong profile with good liquidity and favourable capital structure. This also imparts the company flexibility to purchase ships whenever attractive opportunities arise without adverse impact on the financial position.

GESCO is the largest private sector player in the domestic shipping industry with a diversified fleet of 58 vessels as on June 7, 1999. Apart from shipping which accounted for over 85% of the operating income in 1998-99, the company has also been engaged in property development and commodity trading. The company has decided to demerge the property business with effect from April 1, 1999. Under the demerger scheme, the shareholders of GESCO would be allotted 1 equity share of the new company for every 10 shares of GESCO resulting in a 10% reduction of GESCO’s paid up equity share capital to Rs. 2588.0 mn. While the existing ‘own, develop and sell’ projects are being retained by GESCO the newer property management projects are being transferred to the new entity. The company reported a Profit After Tax of Rs. 920 million on Income from Operations of Rs. 6.95 billion for the period Apr-Dec 1999. Profits include Rs. 429 mn profit from sale of vessels and other assets.